Realtors are experiencing an unprecedented number of buyers backing out of home purchase agreements, as individuals become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes that were under contract that month. This is the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this rise in cancellations to increasingly discerning buyers who are facing a costly market. She noted that many are walking away from deals over minor issues, as the overall monthly expenses tied to purchasing a home are significant.
In Miami, fellow Redfin agent Rafael Corrales reported “nightmare scenarios” involving last-minute cancellations for minor details. Approximately 2,500 home purchases were called off in the city last month, representing about 17.6% of homes that went under contract in June. Corrales highlighted that the main concern for buyers is affordability.
In June, the median home sale price hit a record high of $442,525, alongside an average 30-year mortgage rate of 6.92%. Combined with high property prices, ongoing elevated mortgage rates, and additional costs like insurance, property taxes, and HOA fees—further strained by inflation—prospective buyers are increasingly hesitant.
Nationwide, this lack of affordability has led to a significant decline in home sales, marking the largest drop in eight months, as reported by Redfin. Month-over-month sales fell by 0.5% in June, the biggest decrease since October 2023, and year-over-year sales fell 1.1%, standing at 21.5% below pre-pandemic levels.